DAVID R. FARMER, J., delivered the opinion of the Court, in which J. STEVEN STAFFORD, J., joined.
This is a dispute over a real estate sales commission. The seller entered into a six-month exclusive listing agreement with a realty company. The agreement expired on August 21, 2007, one day before the eventual purchasers were shown the property. The realty company filed suit to recover a commission asserting it caused the property to be shown to the purchasers prior to August 21 and, in the alternative, the parties orally and through their actions extended the listing agreement to August 30, 2007. The trial court concluded the realty company was not entitled to a commission under the plain language of the listing agreement because the property
In February 2007, the defendant/appellee, Sarah Carver, contacted associate real estate broker Stanley Mills about the possibility of selling her home at 9010 Gandy Cove in Memphis, Tennessee (the "Property"). As a result, Ms. Carver entered into an "Exclusive Right to Sell Agreement" (the "Agreement") with the plaintiff/appellant, Crye-Leike, Inc., a realty company with offices in Shelby County, Tennessee. The Agreement, a form contract that Crye-Leike drafted, contained several detailed provisions governing the parties' relationship. The Agreement granted Crye-Leike an exclusive right to sell the Property until August 21, 2007. The Agreement also entitled Crye-Leike to a seven percent commission plus an administrative fee "if the Real Estate is sold or exchanged by CRYE-LEIKE, or the undersigned, or any other person, at any price acceptable to the undersigned, during the existence of [the Agreement]." Additionally, the Agreement provided:
Crye-Leike marketed the Property in several ways during the term of the Agreement. Crye-Leike placed a "For Sale" sign at the Property, took photographs of the Property for use in promotional materials, placed the Property in the Multiple Listing Service ("MLS") database,
The potential homebuyers, Calvin and Waukesha Sammons, contacted Ms. Weir to schedule viewings of homes for sale in Memphis. Mr. Sammons specifically identified the Property as one that he and his wife were interested in seeing.
Ms. Carver was not present at either showing of the Property and did not know the Sammonses had viewed or expressed interest in the Property until September 12, 2007.
Crye-Leike demanded upon learning of the sale that Ms. Carver pay a seven percent commission pursuant to the terms of the Agreement and initiated this action after Ms. Carver refused. The realty company alleged it was entitled to a commission because its associate broker, Mr. Mills, participated in or caused the Property to be shown to the Sammonses prior to August 21 and the Sammonses purchased the Property within ninety days of the Agreement's expiration date. Crye-Leike further alleged in its amended complaint that "through the actions of the plaintiff and defendant, the listing agreement was extended and terminated on August 30, 2007" and, thus, it was entitled to a commission because the August 22 showing occurred within the mutually agreed contractual period. Crye-Leike requested an award of $32,350 for the commission and administrative fee purportedly due under the Agreement, as well as an award of attorney's fees, prejudgment interest, and costs. Ms. Carver denied all material allegations in her answer, and litigation ensued.
The parties proceeded to a bench trial in April 2010.
The trial court ruled in favor of Ms. Carver, setting forth detailed findings of fact and conclusions of law in a memorandum opinion. The trial court rejected Crye-Leike's contention that the parties orally modified the Agreement to extend until August 30. The court explained the Agreement plainly prohibited amendment of its terms by oral modification. The Agreement instead required any amendment to be made in writing, signed by the parties, and attached to the original contract, which the parties did not do. The court also rejected the contention that the parties extended the agreement through their actions.
The only remaining avenue of recovery existed in paragraph twelve of the Agreement, which the court noted could conceivably entitle Crye-Leike to a commission. The court nonetheless held the Sammonses were not shown or submitted the Property until after the contractual expiration date of August 21, resolving the ambiguity of the terms "shown" and "submitted" in favor of Ms. Carver. The court consequently concluded Crye-Leike was not entitled to receive a commission on the sale of the Property. Crye-Leike timely appealed.
Crye-Leike presents the following issues, as we perceive them, for appellate review:
We review the judgment of a trial court in a bench trial de novo upon the record, according a presumption of correctness to the factual findings of the court below. Tenn. R.App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993) (citation omitted). This Court will not disturb a trial court's finding of fact unless the evidence preponderates against its finding. Berryhill v. Rhodes, 21 S.W.3d 188, 190 (Tenn. 2000) (citation omitted). Factual findings based on the trial court's assessment of
The first question before this Court is whether Crye-Leike is entitled to a commission because the Property was shown, submitted, or offered prior to August 21 to persons purchasing the property within ninety days of the Agreement's expiration. Crye Leike argues it should receive a commission on the sale of the Property because the eventual purchasers, the Sammonses, would not have learned about the Property absent the efforts of Mr. Mills. Crye-Leike contends not only that it was the procuring cause of the sale from Ms. Carver to the Sammonses, but also that the Property was shown, submitted, and offered to the Sammonses through the listing of the Property on various internet websites prior to the expiration of the Agreement. Ms. Carver disagrees that Crye-Leike earned a commission. She argues Crye-Leike's display of information about the Property in an internet advertisement was not, construing the terms strictly against the drafter of the Agreement, a showing of the Property, a submission of the Property, or an offering of the Property to the Sammonses. She further argues the mere booking of an appointment to show the Property did not constitute a showing of the Property. Crye-Leike did not perform any services within the contractual term entitling it to a commission according to Ms. Carver.
The trial court determined, after considering Crye-Leike's argument that the phrase "shown or submitted" encompassed the transfer of information from Crye-Leike to the buyer of the Property via internet advertisement, that the terms "shown" and "submitted" were susceptible to multiple interpretations. Construing these terms strictly against Crye-Leike as the drafter of the agreement, the court concluded the term "shown" included only those situations where a representative of Crye-Leike was "physically present at a property to allow access to it so that a prospective buyer may view it." The court further concluded the term "submitted" concerned a scenario where Crye-Leike provided a prospective buyer and his or her agent an opportunity to view a property by giving access to a secure lock box or comparable device containing a key to the property. Because Crye-Leike did not show or submit the Property to the Sammonses prior to the expiration of the contract, the court concluded Crye-Leike was not entitled to the requested commission.
"However, on occasion, a contractual provision may be susceptible to more than one reasonable interpretation, rendering the terms of the contract ambiguous." Id. (citing Planters Gin. Co., 78 S.W.3d at 890). "`Ambiguity, however, does not arise in a contract merely because the parties may differ as to interpretations of certain of its provisions. A contract is ambiguous only when it is of uncertain meaning and may fairly be understood in more ways than one.'" Id. (quoting Johnson v. Johnson, 37 S.W.3d 892, 896 (Tenn. 2001)). If a contract is ambiguous, "the court must apply established rules of construction to determine the intent of the parties." Watson, 195 S.W.3d at 611 (citing Planters Gin Co., 78 S.W.3d at 890). Tennessee courts adhere to the general rule that ambiguities in a contract are construed against the drafter. E.g., Spiegel v. Thomas, Mann & Smith, P.C., 811 S.W.2d 528, 531 (Tenn.1991) (citing Hanover Ins. Co. v. Haney, 221 Tenn. 148, 425 S.W.2d 590 (1968)); Ralph v. Pipkin, 183 S.W.3d 362, 367 (Tenn.Ct.App.2005) (citing Certain Underwriter's at Lloyd's of London v. Transcarriers Inc., 107 S.W.3d 496, 499 (Tenn.Ct.App.2002)). "However, the courts will not rewrite an unambiguous term simply to avoid harsh results." Pipkin, 183 S.W.3d at 367 (citing Transcarriers Inc., 107 S.W.3d at 499). "The court will not use a strained construction of the language to find an ambiguity where none exists." Maggart, 259 S.W.3d at 704 (citing Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn.1975)).
We agree with the trial court that the Agreement is ambiguous. Our analysis varies, however, because we find the ambiguity does not stem solely from the use of the terms shown, submitted, or offered. While there are varying definitions of these terms, the parties have not proposed any acceptable definition which alone precludes Crye-Leike from recovering. Rather, the pivotal issue in our view is whether the Agreement requires individualized or direct contact with a purchaser as opposed to the mere advertisement of a property to the general public. Paragraph twelve of the Agreement, which entitles Crye-Leike to a commission for a
Paragraph twelve could broadly give rise to a commission where the Property is generally shown, submitted, or offered to the public via advertisements and the eventual purchaser learns about the property through said advertisements. Relying on accepted definitions of the term "show," one might variously define the showing of a home to include those instances where a person acts (1) "to cause or permit [the home] to be seen," (2) "to offer [the home] for sale," (3) "to display [the home] for the notice of others," or (4) "to point [the home] out to others." Webster's Ninth New Collegiate Dictionary 1090 (1991). One might likewise define the submission of a home to a potential homebuyer to require, inter alia, that a person "present or propose [a home] to another for review, consideration, or decision." Id. at 1175. Further, one might define an "offer" of the Property to require that Crye-Leike "present [the home] for acceptance or rejection" or "make [the home] available." Id. at 819. The display of a detailed internet advertisement arguably satisfies the contractual requirement that the Property be shown, submitted, or offered to an eventual purchaser where modern technology permits one to see or examine residential properties without being physically present at the property; permits a real estate broker to present the home generally to the public, including the purchaser, for review, consideration, or decision; and permits a real estate broker to present the home generally to the public, including the purchaser, for acceptance or rejection.
The showing, submission, or offering of a property to the eventual purchaser might, however, encompass a much more limited set of factual scenarios where targeted, personal interactions occur between a real estate professional and the individual homebuyer. The showing of a property to an eventual purchaser could require that a representative of Crye-Leike or another real estate professional be physically present to allow access to a property. A submission of a property to an eventual purchaser could only encompass a setting in which a property is personally presented for the consideration, review, or decision of an individual client. And an offering of the property to an eventual purchaser might occur only where one of Crye-Leike's agents has presented the home to the purchaser individually for acceptance or rejection.
We conclude the Agreement is ambiguous and therefore disagree with Crye-Leike's suggestion that evidence of the eventual purchasers' response to an internet advertisement directed at the general public prior to the expiration of the Agreement entitled the realty company to a commission on the subsequent sale of the Property. The Agreement, construed strictly against Crye-Leike, requires something more. Neither Mr. Mills nor Ms. Weir provided the Sammonses with access to the Property or an opportunity to view the Property in person prior to August 21. Neither Mr. Mills nor Ms. Weir individually proposed the Property to the Sammonses for the consideration, review, or decision prior to August 21. And Mr. Mills did not individually present the Property to the Sammonses for acceptance or rejection prior to August 21. We therefore hold the Property was not shown, submitted, or offered to the eventual purchasers prior to expiration of the Agreement as expressly set forth therein. Crye-Leike is not entitled to a commission under paragraph twelve of the Agreement.
Crye-Leike next contends it should recover because Mr. Mills was the "procuring cause" of the sale between Ms. Carver and the Sammonses.
It is well-settled in Tennessee "that parties to an agreement have the right and power to construct their own bargains." Planters Gin Co. v. Federal Compress & Warehouse Co., 78 S.W.3d 885, 892 (Tenn.2002) (internal quotation marks omitted) (quoting Blake D. Morant, Contracts Limiting Liability: A Paradox with Tacit Solutions, 69 Tul. L.Rev. 715, 716 (1995)). As this Court has stated,
Hillsboro Plaza Enters. v. Moon, 860 S.W.2d 45, 47 (Tenn.Ct.App.1993) (internal citations omitted). "A broker's right to be paid a commission is a contractual matter." Mande Realty v. Deerhead Resort, Inc., Sequatchie Circuit App. No. 87-9-II, 1988 WL 5694, at *2 (Tenn.Ct.App. Jan.29, 1988) (citing Robinson, 293 S.W.2d at 582-83). Thus, where contracting parties agree upon the detailed circumstances under which a broker is entitled to a commission after the expiration of a listing agreement, the contractual language setting forth those rights and duties will control. Cf. Grubb & Ellis/Centennial, Inc. v. Gaedeke Holdings, Ltd., 401 F.3d 770, 774 (6th Cir.2005) (interpreting contractual language leaving "little room for interpretation regarding the right to a commission after the agreement has ended" as not requiring a realty company to establish it was the procuring cause of a sale to recover under Tennessee law). Because the Agreement does not provide Crye-Leike a right to a commission if it was the "procuring cause" of a sale taking place after the contract's expiration, the application of the doctrine under the facts is irrelevant. The crux of the matter is whether Crye-Leike has demonstrated a right to recover a commission under the Agreement. It has not.
The next question before this Court is whether the parties orally modified or amended the Agreement to remain in effect
The trial court's interpretation of the Agreement finds support in the trial testimony of Richard Leike, a principal and broker at Crye-Leike, who conceded that any amendment of the expiration date should have been made in writing. Mr. Leike testified not only that he expects Crye-Leike agents to abide by the written modification requirement, but he also candidly explained he would not expect to be bound by an oral agreement between an agent and a seller that was not put into writing. He further stated that the Agreement, a form contract which he had a hand in creating, never calls for the making of an oral agreement. The following exchange illustrates Mr. Leike's understanding of the language prohibiting oral modification:
Mr. Leike similarly testified that any alleged oral modification of the commission due under the Agreement would be ineffective unless documented by a signed commission deviation form or other writing.
Crye-Leike nevertheless contends the language excluding oral modification does not apply under the facts. Crye-Leike argues Ms. Carver waived the right to enforce the provision of the contract requiring all amendments to be made in writing and, thus, their oral agreement to extend the Agreement was binding. Crye-Leike submits its actions in scheduling appointments with Ms. Carver after August 21 to show the Property and Ms. Carver's delay in requesting Crye-Leike remove the "For Sale" sign from her property until August 30 support its contention that the parties reached an oral agreement to extend the contractual listing period. Crye-Leike further submits these actions demonstrate waiver of Ms. Carver's right to enforce the language in the contract strictly requiring all amendments to be made in writing. Ms. Carver disagrees, arguing that no oral agreement occurred and that Tennessee Code Annotated section 47-50-112(c) prohibited the asserted waiver.
We conclude Crye Leike has not borne its burden to demonstrate waiver. The only evidence of the alleged oral modification comes from the testimony of Crye-Leike's agent. Mr. Mills testified that he contacted Ms. Carver as the expiration date neared to see if she wanted to continue the listing. According to Mr. Mills, Ms. Carver told him "at that point that she wanted to list it — continue for a while, maybe a couple of weeks, and then she would make up her mind." Ms. Carver unequivocally denied that any such conversation occurred. In addition to Ms. Carver's testimony rejecting the assertion that
Given the limited and vague nature of Mr. Mills's testimony, we conclude the preponderance of the evidence does not establish a clear, unequivocal, and decisive act of Ms. Carver to waive the contractual provision requiring any amendment to be made in writing and signed by the parties. Moreover, the record does not contain evidence of an express declaration that Ms. Carver would not require amendments to be made in writing, acts or declarations manifesting intent not to enforce the provision requiring amendment of the Agreement by a signed writing, or a course of conduct supporting waiver of the same. Because the Agreement plainly requires "[a]ny amendments ... shall be made in writing, signed by both parties, and shall be attached to this original agreement and all other copies hereof," we agree with the trial court that no enforceable oral modification of the Agreement's expiration date occurred.
Crye-Leike argues that, even if the alleged oral modification was ineffective, the parties through their actions extended the Agreement beyond August 21. Crye-Leike presents a multifaceted argument on this issue. The plaintiff first contends the parties renewed the agreement by implication when Ms. Carver permitted Crye-Leike to arrange a second showing of the Property on August 22. Crye-Leike next contends the doctrines of waiver, equitable estoppel, and acquiescence preclude Ms. Carver from relying on the expiration date set forth in the Agreement.
Crye-Leike argues Ms. Carver's actions prior to and following August 21 impliedly renewed the Agreement for an unspecified period. This Court in Pyles v. Cole, 34 Tenn.App. 601, 241 S.W.2d 841 (1951), considered a similar argument where the sellers had acquiesced in a real estate broker's efforts to produce a purchase after the expiration of a ninety-day listing agreement. Pyles, 241 S.W.2d at 843. This Court reasoned that "where a provision in a brokerage contract provides for termination at a fixed time the contract will be deemed renewed and the termination provision waived where the principal has recognized that the broker is continuing negotiations looking to a sale or requests that he do so." Id. (citations omitted). The real estate broker in Pyles was entitled to a commission because the sellers "impliedly renewed the contract by accepting [the broker's] efforts and services and agreeing to pay commissions in event of a sale to the prospect originated by him." Id.
The rule of Pyles, however, is inapplicable because the contract governing the parties' relationship in that case did not contain language similar to the language controlling our decision. Here, the parties specifically stated "that [the Agreement]
Crye-Leike next contends the acts of Ms. Carver entitled it to a commission on the sale of the Property under the related theories of waiver, equitable estoppel, and acquiescence.
Harvey v. Farmers Ins. Exchange, 286 S.W.3d 298, 304 (Tenn.Ct.App.2008) (quoting Callahan v. Town of Middleton, 41 Tenn.App. 21, 292 S.W.2d 501, 508 (1954)); accord Osborne v. Mountain Life Ins. Co., 130 S.W.3d 769, 774 (Tenn.2004) (citations omitted). "Estoppel requires as a minimum (1) reliance upon the statement or actions of another without opportunity to know the truth and (2) action based on that reliance which results in detriment to the one acting." Werne v. Sanderson, 954 S.W.2d 742, 746 (Tenn.Ct.App.1997) (citing Campbell v. Precision Rubber Products Corp., 737 S.W.2d 283, 286 (Tenn.Ct.App. 1987)). "Estoppel is not favored and it is the burden of the party seeking to invoke the doctrine to prove each and every element thereof." Buchholz v. Tenn. Farmers Life Reassurance Co., 145 S.W.3d 80, 85 (Tenn.Ct.App.2003) (citing Robinson v. Tenn, Farmers Mut. Ins. Co., 857 S.W.2d 559, 563 (Tenn.Ct.App.1993)).
31 C.J.S. Estoppel and Waiver § 175 (2008) (footnotes omitted); accord Hinton v. Stephens, No. W2000-02727-COA-R3-CV, 2001 WL 1176012, at *3 (Tenn.Ct.App. Oct. 4, 2001) (citation omitted).
Crye-Leike has not established that Ms. Carver waived the right to enforce the expiration date of the Agreement, that Ms. Carver should be equitably estopped from relying on the expiration date set forth in the Agreement, or that Ms. Carver acquiesced in the alleged extension of the Agreement. The preponderance of the evidence does not establish a clear, unequivocal, and decisive act of Ms. Carver to waive the August 21 expiration date. Crye-Leike likewise did not establish conduct amounting to a false representation, concealing material facts, or conveying an impression the facts were otherwise than, and inconsistent with, those which Ms. Carver now relies upon. And Ms. Carver did not passively accept the services of Crye-Leike for such a period of time as to impliedly consent to or acquiesce in the extension of the Agreement. We thus hold Ms. Carver rightfully may assert August 21 as the expiration date of the Agreement.
The final issue before this Court is whether Crye-Leike is entitled to recover under the theory of quasi contract. "Actions brought upon theories of unjust enrichment, quasi contract, contracts implied in law, and quantum meruit are essentially the same." Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 154 (1966). "Courts frequently employ the various terminology interchangeably to describe that class of implied obligations where, on the basis of justice and equity, the law will impose a contractual relationship between parties, regardless of their assent thereto." Id. These equitable doctrines are "founded on the principle that a party receiving a benefit desired by him, under circumstances rendering it inequitable to retain it without making compensation, must do so." Id. (citation omitted).
A party seeking to recover on one of these theories must demonstrate the following:
Castelli v. Lien, 910 S.W.2d 420, 427 (Tenn.Ct.App. 1995); accord Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191, 197-98 (Tenn.2001) (citing Swafford v. Harris, 967 S.W.2d 319, 324 (Tenn.1998)).
The most glaring problem with Crye-Leike's position is that it did not present this issue for consideration before the trial court.
Crye-Leike, a sophisticated party with years of experience in the residential real estate business, knowingly incurred the risk it might not recover a commission by providing services in the absence of a signed writing extending the Agreement. As Mr. Leike candidly testified, Crye-Leike would oppose the assertion of a valid oral modification if the roles of the parties were reversed. While we do not suggest such conduct necessarily bars a realty company from recovering under equitable principles, Crye-Leike has not proven by a preponderance of the evidence that Ms. Carver's actions gave rise to waiver, equitable estoppel, or acquiescence under the facts. Crye-Leike, as a result, has not demonstrated the Property was shown, submitted, or offered to the Sammonses prior to the expiration of the Agreement on August 21 or that Ms. Carver may not rely upon August 21 as the binding expiration date of the Agreement. We accordingly conclude Crye-Leike has not established a right to the requested commission.
For the foregoing reasons, we affirm the decision of the trial court. We tax the costs of this appeal to the appellant, Crye-Leike,
HOLLY M. KIRBY, J., filed a concurring opinion.
I concur in the majority opinion in this case, but write separately to emphasize that the Court's interpretation of the term "shown" in the Agreement is limited to the facts and the proof in this case. Given the evolving importance in the real estate market of the realtor's online presentation of property and the fact that properties are sometimes purchased by buyers who never view the property in person, with different proof, the term "shown" could be given a more expansive interpretation. However, with the proof submitted to the trial court and no contractual definition of the term "shown," I agree with the majority's result and reasoning.
Robinson, 293 S.W.2d at 585. The application of this rule is "doubly strong" where the resumption of negotiations is not brought about by any effort of the seller but instead results from an unexpected inquiry of the eventual purchaser. Id. As this Court has previously explained, a broker who introduces a purchaser and seller does not obtain a "perpetually vested interest" in any transaction taking place between those parties. Pacesetter Properties Inc. v. Hardaway, 635 S.W.2d 382, 389 (Tenn.Ct.App.1981).